Pay as You Drive Car Insurance

Pay-as-you-Drive Car Insurance

Motorists will soon be able to buy pay-as-you-drive car insurance for the first time. Aircraft style black boxes will log details of all journeys, meaning lower bills for those who drive less often or in daylight only.

Norwich Union, Britain's biggest insurer, hopes to have 100,000 of its black boxes fitted to cars by the end of 2006. Drivers will pay more during the hours of 11pm to 6am when they are at greater risk of being killed or seriously injured in accidents.

But civil liberty groups are concerned that the black boxes may be used to collect incriminating information and data against driver - such as breaches of the speed limit. And they fear they could be used to implement a national road pricing network.

The black box is fitted in the boot of the vehicle and is smaller than a video cassette. The box is in constant contact with a satellite which monitors the vehicle's position. Information on journeys is stored on the box then sent to Norwich Union at regular intervals via the mobile phone network. Drivers are billed monthly and the technology can be used to locate a car if it is stolen or breaks down.

The company came up with the idea to help young drivers cut their premiums, currently around £1,100 a year, by 30 per cent. But it will now be made available to all its customers. Norwich Union tested the scheme with 6,500 volunteers drivers. The younger drivers paid a one-off fee of £199 to have the tracker fitted to their cars. They also paid a fixed monthly premium to cover against damage and theft.

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